Cargo Insurance

What is Cargo Insurance?

Cargo insurance is a type of insurance that protects the goods being transported against loss or damage while in transit. It covers the financial losses that may arise due to theft, damage, or non-delivery of goods. This ensures that businesses can recover their losses and continue to operate smoothly. Cargo insurance policies vary in coverage and terms, and therefore it is essential to carefully read and understand its details.

What Does Cargo Insurance Cover?

Cargo insurance covers a wide range of losses that may occur during the transportation of goods. These include:

1. Physical damage to the goods due to accidents, theft and natural disasters.
2. Non-delivery of goods due to theft or loss in transit.
3. Liability claims by third parties for property damage, injury, or death that may occur during the transportation of goods.
4. Costs incurred due to customs seizures, fines, and fees.
5. Jet transit, general transit and other marine perils incidental to the transit of the goods.

Who Needs Cargo Insurance?

Any business involved in the transportation of goods needs cargo insurance, regardless of whether they are a shipper, carrier, or freight forwarder. Since cargo insurance provides protection against unexpected losses, having it ensures businesses can continue operating without disruptions. It is also often a requirement for businesses in the transportation industry to have cargo insurance to participate in trade.

Are There Any Exclusions in a Typical Cargo Policy?

While cargo insurance covers a wide range of losses, there are certain exclusions that are standard in a typical policy. These include:

1. Losses due to insufficient packing or inadequate marking of goods.
2. Losses due to inherent vice, latent defects, or inherent quality of the goods.
3. Losses due to the willful misconduct of the insured or their representatives.
4. Losses due to delay, loss of market, or loss of use.
5. Losses due to war, hostilities, strikes, and political unrest.